G-20 to Set New Rules for Tax Havens Under Regulatory Shake-Up

By

Jonathan Weisman

Updated March 30, 2009 9:55 a.m. ET

WASHINGTON -- The 20 largest economic nations in the world are expected to produce a new set of rules for oversight, transparency and conduct for offshore tax havens next week as part of a broader effort to overhaul the regulatory structure of the world economy, White House officials said Saturday.

The new "rules of the road" for Caribbean and other tax havens will be included in a communiqu&eacute; issued by the Group of 20 nations at a much-anticipated London economic summit on Thursday, said Michael Froman, a deputy White House national-security adviser for international economic affairs.

It would come on top of new goals for global economic stimulus and efforts to coordinate regulatory oversight between the world's largest economies, as well as emerging economic powers such as Brazil, India and China.

White House officials laid out President Barack Obama's goals and agenda, not just for the G-20 summit in London, but a 60th anniversary summit of the North Atlantic Treaty Organization in Strasbourg, France, and Kehl, Germany, a European Union-U.S. summit in Prague and a trip to Turkey.

"After a very aggressive and forward-leaning 60-plus days of this administration regarding national-security concerns, the president wants to continue that pace and continue to face the challenges we face at home and abroad," said Denis McDonough, another deputy national-security adviser.

The trip, Mr. Obama's first outside North America as president, will mix diplomatic protocol and public outreach to harness Mr. Obama's popularity abroad to press his agenda &ndash; both foreign and domestic. The president will hold a town-hall-style meeting with European youths in Strasbourg, give a public address in Prague on countering the proliferation of weapons of mass destruction and cyberterrorism, and hold a high-tech roundtable in Istanbul connecting the White House with young people from Europe and Southwest Asia, aides said.

Administration officials sought to downplay divisions that have emerged in the weeks preceding the summits. Mr. Froman said no nation would be asked for specific economic-stimulus targets at the G-20 summit, even though summit participants are expected to produce a statement vowing to do what is necessary to lift the world from global recession.

"No single number is sacrosanct," Mr. Froman said.

The president will embrace a European call for the regulation of large hedge funds, he said.

One-on-one meetings April 1 with Chinese leader Hu Jintao, Russian President Dmitry Medvedev, British Prime Minister Gordon Brown and Britain's Queen Elizabeth II will be something of a baptism in diplomatic protocol and social niceties for the new president.

Mr. McDonough said Mr. Obama will "underscore the special relationship" between the U.S. and Britain, a salve to British feelings after White House spokesman Robert Gibbs referred to a "special partnership" during a visit by Mr. Brown, perceived to be a snub by the British press.

On April 2, Mr. Obama will meet the heads of state from Saudi Arabia, India and South Korea. He will also be seeking help enlisting Iranian aid in his efforts to stabilize Afghanistan and Pakistan, especially in stopping a drug trade that has financed Islamist insurgencies in both countries.

Mr. McDonough said Iran shares a mutual interest in the effort, in part because of its "not insubstantial problem of heroin abuse."

On the tax-haven question, Mr. Froman acknowledged that there were no major offshore havens among the nations of the G-20. But, he said, the summit leaders have conducted "a series of dialogues" that will be reflected in the road map for clamping down on tax cheats.

The U.S. remains somewhat divided from Germany and France, which are pushing to blacklist tax-haven nations that don't go along with the emerging G-20 prescriptions.

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